Advantage of using SAP F&R

[former_member431874]

What is the advantage of SAP F&R over the forecast and replenishment provided in standard retail system?

[Former Member · Accepted solution]

F&R is a substantial improvement over the SAP ERP system for retail stores and distribution centers. It is capable

of replenishing stores and distribution centers, largely automatically.

This improvement stems from a sophisticated combination of features including data preprocessing (outlier correction),

automatic forecasting, calculation of daily demands from weekly data, and the ability to incorporate minimum-order

restrictions.

Most retail businesses can use F&R to control the replenishment process in both stores and distribution centers.

However,the forecasting and replenishment algorithms are most applicable to items being continuously replenished, such as dairy products, etc. The system is less adequate for automated replenishment of items that are not continuously replenished, such as flowers, fashion products, and products that are finished in store.

The ERP menu of forecasting tools is limited to exponential smoothing and moving averages, and it does not include all the standard smoothing models.

F&Ru2019s greatest advantage over ERP lies in its ability to use aggregated store data to obtain forecasts for distribution centers, thus linking the replenishment of store and distribution centers within a closed supply chain. Thus it is possible to input aggregated store sales or store orders, as well as the aggregation of the storesu2019 sales forecasts. The aggregated mean sales forecast is used as an explanatory variable to derive the distribution centeru2019s shipments. Moreover, the Collaborative Planning Forecasting and Replenishment (CPFR) interface enables the exchange of sales forecasts with external vendors.

Regards

Prashant Kedare